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A Complete Guide to Freelancing in the Gig Economy

Last Updated: August 01, 2019

Learn how freelancers can not only survive, but thrive, in the booming gig economy.

Table of Contents

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Chapter 1
About the Freelance Economy
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Chapter 2
How Much Can You Make as a Freelancer?
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Chapter 3
Getting Started as a Freelancer
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Chapter 4
How to Find Clients
increase earnings
Chapter 5
How to Increase Freelance Earnings
requirements
Chapter 6
Things Freelancers Need to Know

It used to be uncommon to see full-time freelancers.

But these days, more and more people are freelancing either full-time as a career, or part-time to supplement their regular job.

According to the 2018 Freelancing in America report published by the Freelancers Union, almost 57 million Americans earn their living on a per-contract basis. This number represents a 3.7 million worker increase since 2014. Last year, the Freelancers Union speculated that 50% of Americans will be full-time freelancers by 2027.

It is no surprise that contract-based work is growing. Freelancing offers workers the freedom to set their schedules, choose their projects, and work from wherever they want to.

Plus, with the recent influx of app-based gig platforms, there are more ways to find freelance opportunities than ever before.

No matter what field you work in, whether it’s full-time or as a side hustle, there are ways to turn your skills into a freelance job.

This page will discuss where freelancers can find jobs online, how much you can make, ways to increase your earnings, and more.

Chapter 1

About the Freelance Economy

What exactly is a freelancer? And how does freelancing work?

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Basically, a freelancer is anyone who completes work as a contractor. Freelances are not full-time or part-time employees, instead, they are 1099-C independent contractors.

People work as freelancers in almost every field imaginable.

There are freelance design jobs. There are freelance writing jobs. There are freelance architects, IT administrators, paralegals, and data analysts. No matter the job, there’s someone who does it on a contract basis.

These jobs aren’t just for experts, either. There are plenty of entry-level work-from-home gigs out there for people just getting started.

In other words, you can be a freelancer no matter your skills or level of expertise.

Working as a Freelancer

Traditionally, the hardest part about freelancing was finding work.

If you were a self-employed graphic designer in the '90s for example, you’d have to network, advertise, and cold call to find clients. This aspect discouraged many people from pursuing freelance work.

But thanks to the internet, freelance opportunities are endless due to the countless sites and apps to find contract work. Companies and individuals are scouring the internet for freelancers to help them with a vast range of tasks.

Here are some of the best freelance websites for finding work online:

Upwork: Upwork is most popular freelance marketplace on the web. UpWork hosts freelance gigs for website development to blog writing and everything in between.

People Per Hour: People Per Hour is another site that connects skilled freelancers with the businesses who need them. Overall, it is very similar to Upwork. If you're a freelancer, it's worth it to try them both out.

TopTal: TopTal is explicitly designed for the "top 3%" of freelancers. On TopTal, there are gigs for the best "freelance software developers, designers, finance experts, product managers, and project managers in the world."

99designs: 99designs is a freelance platform for creatives. If you're a graphic designer, you can use this site to connect with companies who need logos, websites, illustrations, videos, and more.

Fiverr: On Fiverr, you can sell any service for $5 (and increase your rate over time). The site is popular for people looking for entry-level work, but experienced professionals also use the site (but they charge a lot more than $5).

These are just a few of the most popular freelancer platforms. Remember, it's not required to use an online platform. There are thousands of freelancers who rely on their own marketing efforts to secure gigs.

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Chapter 2

How Much Can You Make as a Freelancer?

Freelancing not only provides freedom, it also provides income. How much, exactly? Let's take a look.

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According to experts, the average freelancer makes $19 per hour before taxes.

But, when we talk about “freelancers,” we’re talking about a large group of people.

After all, freelancers include everyone from Uber drivers and Upwork transcriptionists to high-paid branding experts and management consultants.

So although $19 an hour is the average, it doesn’t say much about potential earnings. Let's dive in to see what affects freelancer earnings.

Making Money as a Freelancer

In most cases, freelance workers set their rate. This means your earning potential is entirely up to you.

Freelancers can choose to charge per-hour or per-project. Many writers and editors charge by the word. Some video and audio editors charge for each minute of content edited.

Ultimately, it’s up to the worker to determine what their time is worth. Marketing consultants charge between $65 and $300 per hour (on average) because they know that they provide a valuable service.

Most of the online freelance platforms allow users to set their rates.

Platforms like Upwork take around a 20% service fee out of all transactions. TopTal doesn't charge freelancers (it gets revenue from the clients). Outside of these platforms, freelancers can charge whatever the customer is willing to pay.

It is important to note that freelancers are in charge of all of their own expenses and taxes.

Because you aren’t on a company payroll, no one deducts your taxes from your paycheck. It’s up to freelancers to pay estimated quarterly taxes throughout the year.

Our advice: If you're in the United States, set aside at least 30% of your income for state and federal taxes. If you don't, be ready for a shock when you complete your income taxes.

To reduce your taxable income (which reduces how much you'll owe in taxes), track your expenses and write off deductibles.

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Chapter 3

Getting Started as a Freelancer

When it comes to freelancing, getting started is the hardest part.

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There are a million different ways to enter the freelance world. Depending on your industry and your goals, that path will vary.

The easiest way to start is to sign up for a gig platform. Once you've built out your client base, you can depart from a freelance platform and acquire clients through referrals.

How to Become a Freelancer

There’s no “right way” to become a self-employed contractor. The journey looks different for everyone.

But, there are a few things you can do to get the ball rolling and find a freelance job online.

Below, we’ve outlined the basic process for getting started. These steps will allow you to snag a few contracts and get some experience early on.

1. Polish Your Skills

Before you go out and market your services, make sure you have the chops to handle the job. Whether you’re working with graphics, computer code, or people, you should be confident in your abilities. Spend some time reviewing the basics and honing your skills before applying to any freelance jobs.

2. Create a Resume

Freelancers need resumes just like traditional employees. After all, clients want to know why you’re the right candidate. Put together a resume that outlines all relevant experience.

3. Assemble a Portfolio

As a freelancer, your portfolio is even more important than your resume. Clients want to see examples of your work before offering you a position. Whether you’re a writer, designer, developer, or consultant, they like to know what you’ve worked on. Get samples together that show what you’re capable of.

4. Sign up for a Freelancer Website

As we mentioned, using a freelancer platform isn't necessary, but they are the easiest way to get your foot in the game.

5. Create a Profile

On freelancer platforms, your profile is your marketing tool. Make your profile appealing to potential clients by uploading a professional headshot. Craft a captivating headline and summary that outlines why you're the right person for the job. And also be sure to include links to your resume and portfolio.

6. Submit Proposals

Now that you're ready, search for jobs in your field. Since you are just starting out, look for low paying gigs that you can use to build your portfolio. When you find a job you want to apply for, submit a customized cover letter (don't copy and paste) explaining why you are interested in the gig and why you would be a great fit.

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Chapter 4

How to Find Clients

When you are just getting started, finding clients can be hard. Here are some tips to make it easier.

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Platforms like Upwork, Pay Pay Hour, and TopTal make it easy to connect with potential clients.

After all, they’re basically big pools of people searching for talent.

By signing up for one of these sites, you’ll open yourself up to a network of customers you wouldn’t otherwise have access to.

At a certain point, you may want to move outside of online platforms to avoid service fees, but these are great places to start.

How to Find Clients on UpWork, PPH, and Other Platforms

Using freelance platforms like UpWork make it easy to get started in the world of freelancing. Here's how you can use those platforms to accelerate your freelance career.

1. Apply Directly For Jobs You Want

The best way to land contracts is to search for listings and bid on the ones you’re interested in.

Each platform has a search feature that allows you to search for gigs by type of work, price range, estimated timeline, and other characteristics.

You can also type in keywords and set filters to look for jobs related to a specific topic.

Once you find one that suits your interest, you’ll submit a bid. Essentially, you’ll send a cover letter explaining why you are suitable for the job, along with a price quote.

At that point, the lister will sort through all of their bids and get back to you if they want to hire you.

2. Optimize Your Profile

Some hiring companies prefer to search for freelancers instead of opening up a call for bids.

To attract potential contractors, make sure that your profile includes all of the keywords related to the work you do.

For example, if you’re an audio engineer, make sure that you mention all of the different types of sound you’ve worked with: music, podcasts, film audio, etc.

That way, anyone searching for an audio engineer will find your profile in their search.

3. Nail the Interview

Once you've connected with a potential employer, you will probably have an interview. Companies hire freelancers just like they hire full-time employees, and the interview process is very similar as well.

Check out these tips on how to ace a freelancer interview to learn how to prepare.

4. Ask for Reviews and Referrals

Once you start completing contracts, ask your satisfied customers to submit a review. Reviews go a long way in demonstrating your credibility. Once you have a few 5-star reviews under your belt, it gets easier and easier to land new gigs.

If they’re happy with your work, they’ll probably be glad to refer you to their friends!

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Chapter 5

How to Increase Freelance Earnings

Making a little bit of money as a freelancer is fun, but making a lot of money is even better.

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For a lot of people, freelancing is a big gamble.

If you do it wrong, you’ll end up sitting around all day looking for work, losing money in the process.

If you do it right, you can end up making far more money than you would in a 9-5.

We want to help you do it right.

Here are some tips to increase your earnings as a freelancer, no matter what field you work in.

How to Make More Money Freelancing

Here are a few things you can do to boost your earnings as an independent contractor:

Find a Niche

Successful freelancers identify their niche and corner it. If you get good at logo design, for example, companies will seek you out to make one for them.

Of course, you can’t afford to pass up work early on in your career. So, start by doing everything and work toward a specialization over time.

Don’t Undercharge

The biggest mistake new contractors make is lowballing themselves. Too many experts are faced with imposter syndrome and are afraid to charge what they're really worth.

When you're deciding your hourly rate, look at what other people are charging.

Also, consider your expenses, platform fees, and the number of hours it takes to find a job.

For instance, if you charge $20 an hour on UpWork for a job that took you 5 hours to complete and 5 hours to land, you are going to get paid $100 for a job that took up 10 hours of your time. After you factor in the 20% fee that UpWork takes, then you're only getting $80. That's only $8 per hour. And when you factor in other expenses (like office space, computer hardware, etc.), that number goes down even more.

Companies are happy to pay for good work, so know your value and charge accordingly.

Stay Organized

Organization is the key to productivity. It’s far easier to get work done when you have your things in order.

Now that you work for yourself, you have to manage your schedule. You also have to juggle several clients at once. By staying organized, you can optimize your working hours and get more projects done in a shorter period of time.

There are a ton of freelancer tools out there that will help you work efficiently and effectively.

Track Spending for Taxes

Every quarter, you have to pay around ⅓ of your income in estimated taxes.

You can decrease your taxable income by writing off business expenses. Most money that you spend to earn a living is tax deductible.

This includes computer equipment, lunch with clients, and internet bills. If you save your receipts and total them up, an accountant can write the cost off.

Writing off expenses ultimately decreases the amount of taxes you owe to the government, which increases the amount of money you get to keep in your pocket.

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Chapter 6

Things Freelancers Need to Know

5 things every freelancer should know.

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Ready to start your career as an independent contractor? Ready to start working from home?

Great! Before you get started, however, there a few important things you should know.

5 Things You Should Know Before You Start Freelancing

Here are a few things to keep in mind as you start your life as a self-employed person:

1. You Need Health Insurance

Unlike payroll employees, independent contractors don’t have company health insurance. So, you have to find a way to pay for medical expenses.

Fortunately, there are several health insurance options for freelancers. Get this figured out ASAP.

2. Start While Your Employed

If you don’t have any money in the bank, you should wait to begin contracting full-time. Keep your day job and work a side job from home in your free time.

Keeping your regular job allows you to save and get some experience under your belt before you branch out on your own.

3. You Will Get Rejected (a lot!)

You’re going to face a ton of rejection, particularly early on. Don’t worry about it. We all go through it.

Remember, there are dozens of people (possibly more) going after the same gigs as you. Be persistent, keep submitting applications, and the work will come gradually.

4. Hold Yourself Accountable

When you work for yourself, it’s easy to take days off. After all, no boss is making sure you show up every day.

But if you want to succeed, you have to wake up and get to work, even if you don’t have a contract.

5. Set up an LLC

You don’t need a business license to work as freelancers. But, you may want to establish yourself as a business entity.

By enrolling as a Limited Liability Corporation, or LLC, you’ll protect yourself from property seizure if your business goes bankrupt.

Don’t worry about this too early on, but keep it in the back of your mind for later.

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